Estimates put the amount owed by Ruia-controlled Essar Steel at Rs 37,000 crore; the company is one of the 12 defaulters reportedly identified by RBI for swift recovery under insolvency code.

Employees walk past an Essar Group logo outside their headquarters in Mumbai May 20, 2013.Reuters file

Essar Steel, one of the 12 chronic defaulters who owe a colossal amount in loans to Indian and international banks, got temporary relief when the Gujarat High Court stayed an insolvency petition filed against the company by Standard Chartered Bank.

The company, which owes Rs 37,284 crore to various lenders, pre-empted a move by the Ahmedabad Bench of the National Company Law Tribunal (NCLT) to initiate proceedings under the Insolvency and Bankruptcy Code (IBC), reported bar and bench on Wednesday.

The Court upheld the grounds on which Essar Steel had sought to halt proceedings. The company argued that the RBI letter to banks was dated June 13, 2017 while fixing the effective date for initiating proceedings as March 31, 2016.

Pursuant to the RBI's decision to identify 12 defaulters whose accumulated debt accounts for almost 25 percent of the bad loans in the banking system, the lenders initiated the next steps.